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Walgreens Boots Alliance (WBA) Gains As Market Dips: What You Should Know

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In the latest trading session, Walgreens Boots Alliance (WBA) closed at $43.83, marking a +0.27% move from the previous day. This move outpaced the S&P 500's daily loss of 0.63%. At the same time, the Dow lost 0.67%, and the tech-heavy Nasdaq lost 0.15%.

Prior to today's trading, shares of the largest U.S. drugstore chain had gained 2.8% over the past month. This has outpaced the Retail-Wholesale sector's loss of 5.45% and the S&P 500's gain of 0.89% in that time.

Walgreens Boots Alliance will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $0.96, down 36.42% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $32.11 billion, down 5.64% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $5.05 per share and revenue of $132.35 billion. These totals would mark changes of -4.9% and -3.66%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Walgreens Boots Alliance. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Walgreens Boots Alliance is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, Walgreens Boots Alliance is holding a Forward P/E ratio of 8.65. For comparison, its industry has an average Forward P/E of 8.65, which means Walgreens Boots Alliance is trading at a no noticeable deviation to the group.

Also, we should mention that WBA has a PEG ratio of 2.38. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. WBA's industry had an average PEG ratio of 1.97 as of yesterday's close.

The Retail - Pharmacies and Drug Stores industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 246, which puts it in the bottom 3% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow WBA in the coming trading sessions, be sure to utilize Zacks.com.


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